1. July CPI inflation expected to rise to 2.8% annually. 2. Goldman Sachs projects core inflation at 3.08% for July. 3. Tariffs likely to continue boosting inflation rates in the coming months. 4. Fed scrutiny intensifies, complicating potential rate cuts next month. 5. Increasing tariffs causing visible impact on businesses and investment plans.
Higher inflation can lead to increased interest rates, which often depress stock prices. Historical examples include the late 1970s and early 1980s when high inflation led to bear markets.
Inflation data directly influences the Fed's monetary policy, which heavily impacts the S&P 500. Concerns over rising inflation and potential interest rate hikes create market volatility.
Inflation reports and Fed decisions will soon affect market sentiment and trading behavior. The immediate impact will be felt around the upcoming Fed meeting in September.